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The Importance of Cohabitation Agreements

Published on August 7th, 2020

Louise Mitchell

Many couples live together for decades and wrongly assume they acquire legal rights as “common law spouse”.

This is not the case, there is no such right in English law.

If you are not married, you may encounter problems if you cohabit and the relationship subsequently breaks down.

Cohabitation Agreements are drafted on an individual basis to reflect a clear understanding of what your financial commitments are to each other.

This can set out the ownership of existing property that either party may have purchased prior to the start of the relationship. It can define how joint savings and jointly acquired assets will be distributed. It can state how the household bills will be paid each month. It can even give certainty as to who would retain ownership of the family pets!

As every Agreement is drafted based on individual circumstances it can contain any details that the parties wish to be included. As a starting point it is advised that consideration is given to the following:

  • – Ownership of property
  • – Deposit paid on any property purchase
  • – What share of the mortgage or rent each party will pay
  • – How household bills will be paid
  • – How bank accounts will be held
  • – Whether each party will take out a life insurance policy for the benefit of the other
  • – How debts will be dealt with and who will take responsibility for anything considered a “joint” debt
  • – Who will retain assets other than the home, for example, cars, furniture, jewellery
  • – Next of kin rights

If one party owns a property prior to cohabitation then an Agreement can reflect that this is to kept in their sole ownership and prevent the other party from having a claim over it. This needs to be given careful consideration from the outset as the other party may believe this would be grossly unfair, especially if they are going to be making contributions to the upkeep and improvement.

If a property is being purchased at the outset of the relationship then decisions need to be made as to whether the property is going to be jointly owned in equal or unequal shares depending on the contributions being made.

Additionally, what would happen to the property should you separate? Will one party have the option of buying the other out or will the property have to be sold?

Everyone commences a relationship believing, or at least hoping, it will last. Sadly, this is not always the case. Having a Cohabitation Agreement in place can avoid expensive disputes in the future should the relationship break down. It also provides peace of mind throughout the relationship, confirming that you have considered how each would be provided for financially. Similarly, it is also advised that if you are planning to cohabit you should make a Will as again if you are not married you have no automatic right to inherit your partner’s estate.

The many uncertainties in life can prove difficult to navigate. If your relationship has reached the stage where you wish to move in together then having an Agreement in place that sets out how you want that to happen ultimately provides one less thing to worry about.

Please contact our head of family law Louise Mitchell for further information.

IMPORTANT NOTICE: The information provided in our articles reflects only a narrative of some elements to consider on the topic. The articles do not contain considered legal advice and should not be relied upon as advice. If you are interested in obtaining advice, please contact one of our lawyers who will be happy and able to advise you on your own particular circumstances.